Red tape, harmonisation, and innovation – top execs outline three ways to improve EU circular economy package

Sustainability executives from Ikea and Jaguar Land Rover detail the key policy moves they want to see from Commission’s environment chief

 Business leaders gathered in London on Tuesday to discuss where they want to see European action on the circular economy, following the Commission’s unveiling of its latest circular economy package in December.

They were joined by Daniel Calleja Crespo, director general for the environment for the European Commission, to discuss what the next steps will now be for the wide-ranging policy framework.

The proposed package sets out a strategy for developing the circular economy across all industrial and business sectors, alongside a review of current EU waste legislation. However, it has been criticised for watering down recycling targets, and attacked for abandoning a specific target on food waste. Others have praised the ambition of the package for setting out a framework for covering waste streams across the entire bloc and introducing new eco-design standards.

However, many UK businesses are still keen to work with the EU on how to improve circular economy initiatives further, regardless of the Brexit speculation currently dominating the airwaves. Speaking on Tuesday at the Aldersgate Group hosted event, chair Joan Walley highlighted that many innovative companies are already demonstrating how using resources less wastefully is key to the future sustainability and competitiveness of the British economy. “It’s just really important that Brussels has a very clear view of how there are businesses here in the UK who actually want to rev [up the circular economy], who absolutely feel just how important the package currently under discussion in Europe is, and how that is one step in the overall journey that we have to make,” she said.

Meanwhile, Crespo outlined how he sees the circular economy package as crucial to the EU’s wider efforts to move to a more sustainable economy. “We need to move from the classical economic linear model, where you produce, consume and throw away, into a more virtuous economy circle that through all stages of the lifecycle of the product has a potential to make our continent more resource efficient, more effective, and actually more competitive,” he said.

He also touted the importance to Europe’s economic competitiveness of moving to a circular economy model, particularly considering the continent’s mass reliance on imported goods. “Every single resource counts,” he said, pointing to the fact the bloc imports six times more than it imports. “If we are able to develop efficiency through the circular economy model, we can have very important savings.”

The Ellen MacArthur Foundation, which campaigns for the adoption of circular economy models, estimates the new package’s drive towards greater resource efficiency could lead to savings of €600bn a year by 2030, a four per cent GDP increase, and a reduction in greenhouse gas emissions of between two and four per cent. The UK alone also could reap significant benefits, with Crespo pointing to projections estimating 200,000 jobs will be created alongside £100bn in productivity gains through compliance with the package’s targets.

Meanwhile, the four sustainability executives on the panel from Jaguar Land Rover, Ikea, Viridor and Interserve welcomed the new package, but pointed to several key areas where improvements could be made that would make it easier still to adopt circular economy models.

1. Don’t classify waste too soon

We need to be able to use secondary materials, such as those obtained from dismantling buildings around Europe, where they are needed – something which shouldn’t be hindered by classifying such material as waste, said Mat Roberts, director of sustainability strategy at global construction and support service firm Interserve. “It’s very important that those materials can be transferred across borders – it’s incredibly important that if we take something to pieces in Portugal we can reuse some of that material in Spain, or in France, or Italy, or anywhere we want to move it to, without huge amounts of additional regulation, reclassification and overlook,” he said.

Joanna Yarrow, head of sustainability for Ikea UK and Ireland, said concerns about red tape and the early classification of material as waste are shared by the retail industry. “We similarly want to close the loop internally – we want to take our own material back into our production,” she said.

2. Harmonise (or not)

It’s also crucial that firms have a clear foresight into what legislation is to come, which will allow companies to have the confidence to go forward with waste initiatives and innovative new products right across the bloc, Yarrow said. As an example, she pointed to Ikea’s decision last September to switch its lighting range to only LEDs. “We could do that because we were confident in what the legislation was and what it was going to be, and we could take the decision to move forward and exceed that and offer something better to all our customers,” she said.

However, there is a flip side to this. We also have to recognise the reality of having 28 member states, said Inder Poonaji from British recycling and waste management company Viridor. “What we shouldn’t do is have a one size fits all,” he said. “What we need is an ambition for the European economy, but one that doesn’t restrict.” The Commission should therefore focus on a “high level minimum standard” approach, rather than a “very detailed autocratic” one he added.

3. Incentivise innovation

The Commission has this year launched a call for innovation in the circular economy backed by €600m of funding, and Crespo promised that next year investment would be increased to €1bn. Jonathan Garrett from Jaguar Land Rover welcomed the boost to innovation funding, and pushed the Commission to make R&D a top area of focus. “This is about companies not doing minimal compliance: it’s that kind of funding we can harness to improve our competitiveness,” he said, pointing to his firm’s research into biomaterials that was stimulated by research funding. “Companies want to innovate, but one of the barriers is they’ve got short term cost pressures, so anything to help to fund that potential is really welcome. We’ve got to incentivise this innovation.”

The debate about the future of the EU’s circular economy package will continue regardless of what happens in June’s referendum. But one thing is clear, there are businesses across the bloc who want the EU to be more, not less ambitious, in its development of circular economy policies.




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